Anti-Boycott Regulations

DEFINITION of 'Anti-Boycott Regulations'

A law that prevents customers from withholding their patronage of a business. In the United States, anti-boycott regulations primarily deal with withholding support from Israeli businesses. The Arab League formally requires member countries to boycott trade with Israel and trade with companies that trade with Israel based on an agreement it enacted in 1948. In response, the United States implemented anti-boycott laws in the mid-1970s to prevent U.S. companies from boycotting trade with Israeli companies. The law also prohibits refusing to employ U.S. citizens because of their nationality, race or religion.

BREAKING DOWN 'Anti-Boycott Regulations'

The Export Administration Act sets forth the U.S. anti-boycott regulations and the criminal and civil penalties (fines, imprisonment and denial of export privileges) for companies and employees who don't comply with the law. The purpose of the regulations is to prohibit U.S. companies from implementing other countries' foreign policies when those policies disagree with U.S. policy. A related Internal Revenue Service regulation denies tax benefits to companies that do not comply with anti-boycott laws.